Bitcoin is gold 2.0, can transform remittances: Brock Pierce

Brock Pierce said that Bitcoins could transform the remittances business in the country and the digital currency could gain increasing acceptance in India.Jochelle Mendonca | ET Bureau | February 29, 2016, 07:31 IST

MUMBAI: Bitcoins could transform the remittances business in the country and the digital currency could gain increasing acceptance in India, given its gold-like attributes, the chairman of the global Bitcoin Foundation told ET.

The Bitcoin Foundation was started in 2012 to standardise, promote and protect the use of Bitcoins. The foundation lobbies, organises conferences and provides technical support for the digital currency.

"I am really surprised bitcoin isn't more popular in India, given the strong gold culture here. I call it Gold 2.0. It has all the attributes other than the fact that it isn't tangible, and tangibility is less important in the digital age," Brock Pierce, chairman of the Bitcoin Foundation, said on the sidelines of the SingularityU India Summit held by INK Talks.

Pierce said the digital currency could be used in the remittances as the peer-to-peer transaction would not attract the high service fee that money transfer companies charge.

"Service fees are sometimes up to 10% of the transaction. On small remittances from places like the Middle East it could be higher. That's a great use case for Bitcoin," said Pierce.

Bitcoins are a peer-to-peer digital payment currency. Instead of using a central authority to verify the digital transaction, bitcoin uses a process called Blockchain, which is effectively a distributed public ledger that tracks all transactions.

The order of transactions in the ledger is enforced by cryptography. Bitcoins are 'mined' when users complete computing tasks such as helping verify transaction in the peer-to-peer network. Bitcoins have faced tremendous challenges.

It is used widely in money laundering and other illegal activity online. A former vice president of the Bitcoin Foundation had to resign before pleading guilty to charges that he laundered money through the illicit online marketplace, Silk Road.

The price too fluctuates constantly with large bitcoin exchanges such as Mt Gox collapsing. In November 2013, a single bitcoin was worth as much as $1,137, and is now worth about $426, or about .`30,000. Pierce said the troubles surrounding Bitcoin were similar to those faced by the internet when it first started out.

"When the internet first launched, you had all these newspapers saying that the internet was only used by bad people, to do bad things and what was the point of it. But the internet changed everything, just like Bitcoin will." Pierce explained.

Pierce is also managing partner at Blockchain Capital, a venture fund that focuses on startups that work on services surrounding bitcoin or those building enterprise products.